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Stop banks from acting as they please – Zondo

Chief Justice Raymond Zondo

Chief Justice Raymond Zondo

Published Jun 24, 2022

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Cape Town - Sekunjalo Investment Holdings and associated companies have hailed state capture commission of inquiry chairperson Chief Justice Raymond Zondo’s recommendation that banks should be legally prevented from closing accounts as they please.

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Parts of Justice Zondo’s final report lambasted the banks for rushing to close bank accounts belonging to various companies linked to the Gupta family following email leaks that suggested unlawful activities on the part of Oakbay and other Gupta-related entities.

Justice Zondo said although the Guptas were found wanting in their attempts to capture the state, their rights should be protected.

“It is therefore recommended that relevant existing legislation governing banks be amended to introduce this requirement of fairness or, if warranted, a new piece of legislation to be enacted which will make this a requirement.

“The bank would need to afford the client a proper opportunity to be heard and should not just go through the motions or pay lip service to the principle of ‘audi alteram partem’ (hear the other side),” said Justice Zondo.

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His recommendation comes a week after the Equality Court interdicted Nedbank from closing bank accounts belonging to Sekunjalo and its subsidiaries.

“It is heartening to see that the chief justice has taken note of the absolute power the banks have and how there is a dire need for the banking fraternity to follow due process when determining whether a company’s accounts should be closed or not.

“(Justice) Zondo has determined that any company (and individual) should be given a fair and reasonable opportunity to defend itself.

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“This is particularly pertinent in Sekunjalo’s case, considering that several of the banks had elected to close banking facilities of companies related to Sekunjalo and its founder, Dr Iqbal Survé, despite the banks confirming there had been no corruption, money laundering or illicit transfers of funds by any of the parties,” said Sekunjalo in a statement.

The statement added that there was no evidence of any untoward behaviour by Sekunjalo.

“Banks have relied on the ‘reputational risk’, because of negative publicity and its potential associated risk, as their reasons for terminating accounts.”

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Cape Times

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